Molluscum contagiosum (MC) is a highly contagious skin disease caused by the poxvirus, MCV. MC appears as lesions on the body and face and can last months-years before resolving. Lesions occur most frequently in children (5%) and immune compromised individuals (5-18%). The infection is confined to skin alone; it is not systemic. Transmission spreads directly from person-person contact, autoinoculation (scratching) or indirect contact e.g., towels. Current treatments can be painful, cause scarring, pigmentation and psychological distress, especially to children and parents. None of the current treatments that include a range of physical, chemical and medicinal interventions are uniformly accepted or FDA approved. No drug has ever been specifically developed for MC because MCV cannot be grown in any type of cultured cell for the purpose of testing new compounds. We have now made FOUR MAJOR BREAKTHROUGHS. FIRST, we have identified a novel protein target in MCV (mD4) that is essential for viral replication. mD4 is a processivity factor, which together with its hetero-dimeric partner mA20, tether the viral Polymerase to the template to enable synthesis of long strands of DNA. SECOND, we have discovered 4 small molecule inhibitors with different scaffolds that target the mD4 PF and block long-chain DNA synthesis in vitro. THIRD, we have constructed a new infectious Vaccinia hybrid virus (mD4-VV) that expresses the mD4 target protein and is inhibited from infecting cells by all 4 compounds. The mD4-VV hybrid virus is a major advancement for MC drug development since it provides the first cell-based system for screening therapeutics against an essential MCV target protein (mD4) in poxvirus-infected cells. FOURTH, we have now shown the surrogate hybrid virus (mD4-VV) can infect 3-D human skin organ cultures (equivalent to human skin), and that our most potent lead compound 4032 has antiviral activity in this system. Thus, for the first-time, we have (1) a protein target (mD4) essential for MCV replication, (2) a new surrogate hybrid-virus for optimizing analogs directed against the mD4 viral target, (3) a natural human 3-D skin organ culture for testing antiviral activity and (4) several compounds with antiviral activity. AIMS 1-4 are tightly interconnected in which medicinal chemistry will be applied in an iterative process to optimize drug efficacy and safety through progressive steps that test for inhibition and binding to the target protein, potent antiviral efficacy in cell and human 3-D skin organ cultures, skin penetration and safety, and efficacy in a cutaneous mouse model of infection with mD4-VV. The specific goal of this Phase II SBIR will be the identification of 1 or more advanced leads suitable for IND-enabling studies. The ultimate goal of our program is to provide a topical skin formulation that will safely and rapidly resolve MC lesions that occur mainly in children and immune compromised patients.